Back
2021 Supreme(Guj) 954
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, RAJENDRA M. SAREEN, JJ.
Shilp Realty Private Limited – Appellant
Versus
Income Tax Officer, Ward 4(1)(3), Ahmedabad – Respondent
R/Special Civil Application No. 13025 of 2021
Decided on : 04-10-2021
Advocate Appeared:
For the Appellant : MR B.S. SOPARKAR
For the Respondent: MRS MAUNA M. BHATT
Point of law: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years.
Headnote:
Income Tax Act – Section 139,147,133,148,133A and 148A - Requisite belief – Income tax - Petitioner filed return of income for year declaring the total loss of certain - Case was not selected for scrutiny nor scrutiny assessment was framed - Respondent issued notice under section 148 for reopening assessment for Assessment Year - Petitioner filed return, in response to notice and reasons for reopening were supplied - According to petitioner, these reasons are misconceived and baseless - Various objections have been raised and request was made to respondent to drop reassessment proceedings - After about more than a year on respondent disposed of objections and rejected resistance by such objections in totality - It is urged and alleged that officer did it in a hurry without dealing with contentions of petitioner- Impugned notice issued, under section 148 on as also order passed against preliminary objections both are under challenge - Whether any material is available on record from which the requisite belief could be formed by Assessing Officer.
Finding of the court : It is not the length of order, which is reason of our remand, it is the cryptic manner of dealing without any semblance of reasons which necessitated such remand - Let the said task be completed at the earliest – Court have ascertained from learned counsel that there is nothing further that needs to be added to the written objections to the reasons recorded – Court have not entered into merits of matter and this direction or disposal shall not affect rights of the either side on merit so far as material which has been gathered for reopening and objections raised against same by other side are concerned - If the outcome is in any manner prejudicial to petitioner, two weeks’ further time shall be given to petitioner to enable him to question same- If no legal recourse is taken by him, or no direction is received by Assessing Officer not to proceed with finalizing of such proceedings, he shall complete this assessment in the four weeks thereafter.
Result: Petition disposed of.
JUDGMENT :
SONIA GOKANI, J.
1. This petition is preferred challenging the notice dated 19.03.2021 issued by the respondent No.1 under section 148 of the Income Tax Act directing the petitioner to furnish the return of income for the Assessment Year 2013-14 alleging the same to be bad in law. The petitioner also questions the order disposing of objections on 27.07.2021 by respondent No.2 as contrary to law and without any jurisdiction.
2. Brief facts are as follows:-
2.1 The petitioner filed return of income for the year 2013-14 on 11.09.2013 declaring the total loss of Rs.37,922/-. The case was not selected for scrutiny nor scrutiny assessment was framed.
2.2 Respondent No.1 issued notice under section 148 on 19.03.2020 for reopening the assessment for Assessment Year 2013-14. The petitioner filed the return, in response to the notice and reasons for reopening were supplied on 26.06.2020. According to the petitioner, these reasons are misconceived and baseless.
2.3 Various objections have been raised on 25.07.2020 and the request was made to the respondent to drop the reassessment proceedings.
2.4 After about more than a year on 27.07.2021, respondent No.2 disposed of the objections and rejected the resistance by such objections in totality. It is urged and alleged that the officer did it in a hurry without dealing with the contentions of the petitioner. The impugned notice issued, thereafter, under section 148 on 19.03.2020 as also the order passed against the preliminary objections dated 27.07.2021 both are under challenge.
2.5 The prayers sought for are as follows:-
“7. The Petitioner, therefore, prays that this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to:
(a) quash and set aside the impugned notice dated 19.03.2020 at Annexure-’A’ and the impugned order dated 27.07.2021 at Annexure-”F” to this Petition;
(b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the notice at Annexure-’A’ and the impugned order dated 27.07.2021 at Annexure-”F” to this petition and stay further proceedings for assessment for A.Y. 2013-14;
(c) any other and further relief deemed just and proper be granted in the interest of justice;
(d) to provide for the cost of this petition.”
3. In response to the notice issued by this Court, learned Senior Standing Counsel Ms. Mauna Bhatt appeared and she has sought time to file the reply. However, considering the urgency and apprehension that the assessment may be framed in the interregnum, we have chosen to here both the sides finally.
4. The respondents chose to place on record the material to substantiate the reasons recorded for reopening of the assessment with a request that the same can be perused confidentially as it also has a wider ramification.
5. We have heard Mr. Bandish Soparkar, learned advocate for the petitioner. According to him, the reasons recorded suffer a serious statutory illegality, as there is no independent application of mind by the Assessing Officer. It is a borrowed satisfaction received from ADIT (Investigation), Kolkata. There is nothing to indicate that the respondent examined the veracity of the information and there is a breach of statutory provision of recording the reasons and to have personal belief and satisfaction after investigation and on application of independent mind. The reasons do not show as to how the petitioner is held to be a beneficiary, as no money has been received by petitioner from M/s. Shubhshree Barter Pvt. Ltd.
5.1 According to the petitioner, no income has escaped assessment and information received from ADIT, Kolkata is about one M/s.Shubhshree Barter Pvt. Ltd. where high value transactions have been noticed. It is seen that funds have bee
